10th Circuit Upholds Constitutionality of Do Not Call Registry
February 17, 2004. The U.S. Court of Appeals (10thCir) issued its opinion [51 pages in PDF] in FTC v. Mainstream Marketing Services (and consolidated cases), the telemarketers' constitutional challenge to the Federal Trade Commission's (FTC) do not call registry. The District Court held that the do not call registry violates the First Amendment free speech rights of telemarketers. The Appeals Court reversed.
(The Appeals Court also either reversed, or denied petitions for review, in three related cases that were consolidated with this case.)
The Appeals Court wrote that "The four cases consolidated in this appeal involve challenges to the national do-not-call registry, which allows individuals to register their phone numbers on a national ``do-not-call list´´ and prohibits most commercial telemarketers from calling the numbers on that list. The primary issue in this case is whether the First Amendment prevents the government from establishing an opt-in telemarketing regulation that provides a mechanism for consumers to restrict commercial sales calls but does not provide a similar mechanism to limit charitable or political calls."
The Appeals Court held that "the do-not-call registry is a valid commercial speech regulation because it directly advances the government’s important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech. In other words, there is a reasonable fit between the do-not-call regulations and the government’s reasons for enacting them."
The Appeals Court wrote that the District Court misapplied the opinion of the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980).
The Appeals Court held that "1) the do-not-call list is a valid commercial speech regulation under Central Hudson because it directly advances substantial governmental interests and is narrowly tailored; 2) the registry fees telemarketers must pay to access the list are a permissible measure designed to defray the cost of legitimate government regulation; 3) it was not arbitrary and capricious for the FCC to adopt the established business relationship exception; and 4) the FTC has statutory authority to establish and implement the national do-not-call registry."
Reaction. Federal Trade Commission (FTC) Chairman Timothy Muris stated in a release that "The Tenth Circuit's ruling represents a major victory for American consumers. In upholding the constitutionality of the National Do Not Call Registry, the court has made it clear that the FTC and FCC can and will continue to protect consumers' privacy at home."
Muris (at right) added, citing a survey by Harris Interactive, that "the National Do Not Call Registry is enormously popular among consumers who have signed up by the millions. And, the program is successfully working to limit unwanted telemarketing calls. We are pleased that this popular program, like America’s dinner hour, will not be interrupted."
Federal Communications Commission (FCC) Chairman Michael Powell stated in a release [PDF] that "This decision is a triumph for American consumers. The National Do-Not-Call Registry is one of the most popular and successful consumer initiatives undertaken by the Federal government and, along with the vast majority of our citizens, I commend the court for removing the shadow of judicial uncertainty."
Earlier Proceedings in FTC v. Mainstream Marketing Services. On September 25, the U.S. District Court (DColo) issued its Memorandum Opinion and Order [34 pages PDF scan] holding that the FTC's do not call registry violates the First Amendment free speech rights of telemarketers. The District Court's decision was based upon its analysis that the FTC's do not call registry is content based regulation that covers commercial, but not non-profit, solicitations. See, story titled "Colorado District Court Holds That Do Not Call Registry Violates 1st Amendment" in TLJ Daily E-Mail Alert No. 747, September 26, 2003.
The next day, the FTC filed its Notice of Appeal [3 pages in PDF] with the District Court. It also filed a Motion for an Emergency Stay Pending Appeal [3 pages in PDF] and a Memorandum of Points and Authorities in Support of It's Motion for an Emergency Stay Pending Appeal [9 pages in PDF]. See, story titled "FTC Appeals District Court Ruling That Do No Call Registry Violates 1st Amendment" also published in TLJ Daily E-Mail Alert No. 748, September 29, 2003. See also, stories titled "Do Not Call Registry Developments" in TLJ Daily E-Mail Alert No. 749, September 30, 2003; and "Senate Commerce Committee Holds Hearing on Do Not Call Registry" in TLJ Daily E-Mail Alert No. 750, October 1, 2003.
On October 7 the Court of Appeals issued an order staying the September 25 order of the District Court. This permitted the FTC and FCC to proceed to implement and enforce their rules pertaining to the do not call registry. See, story titled "10th Circuit Stays District Court Injunction of Implementation of Do Not Call Registry" also published in TLJ Daily E-Mail Alert No. 755, October 8, 2003.
On October 17, the FTC, FCC, and USA filed their consolidated opening brief [120 pages in PDF] with the Court of Appeals.
On November 10, 2003, the Court of Appeals heard oral argument
This case is Mainstream Marketing Services, Inc., TMG
Marketing Inc., and American Teleservices Association v. Federal Trade
Commission, et al., U.S. Court of Appeals for the 10th Circuit, No. 03-1429,
and consolidated cases; No. 03-1429 is an appeal from the U.S. District Court
for the District of Colorado, D.C. No. 03-N-0184, Judge Edward Nottingham